Can A Market Correction Strengthen Your Bank’s Brand?

If you pay attention to the stock market, you’ve heard the experts talking about a “correction” a lot over the last few years.

If you didn’t know what they were talking about, we got to see one firsthand in early February. Common sense finally threw some cold water on the traders who had relentlessly pushed equity prices higher for the last few years without regard for the long-term consequences. Instead of panic, this dip in stock prices has been largely greeted by experts with a sigh of relief and an exasperated “it’s about time.”

With that being said, for millions of Americans who only occasionally peek at the balance in their 401(k) accounts, this market correction came as a bit of a shock. Anyone who had money in stocks in 2008 is understandably skittish about sudden shifts in the markets, and millennials – who seem to have a distrust for the economy baked into their DNA – are even more wary. As a whole, everybody from the middle class to the one-percent have been given a new reason to keep one eye on their investments – all of them.

So what does that have to do with the banking industry?

Unlike the housing bubble, this latest downturn can’t be traced back to giant corporate mega-banks and their need for growth. That means that it may actually serve as an opportunity for banks, especially community banks. Why? Because even while community banks have been forced to work extra hard to seem progressive in light of the seemingly daily onslaught of new fintech, nothing has ever diminished their image as being safe.

In other words, if the prevailing attitude over the last few years has been “any risk is good risk,” reality in 2018 seems to be moving back toward “there’s nothing wrong with a little safety.” While it’s entirely possible that the Fed will be spooked enough to pump the brakes on its quest to raise interest rates, I believe that there will still be opportunities in the coming months to shift attitudes toward deposit accounts at banks. For decades, experts told us that diversification was the key to a successful portfolio. It’s not unreasonable to believe that banks can use their branding power to regain some of that balance.

Where should you start? Be subtle. Remind customers and prospects that your bank is a convenient place to invest that is both flexible and productive – all of the amenities without all of the anxiety, so to speak. Above all else, be positive. That’s one thing that you can control that the stock market cannot. If prospects see your institution as an inviting, secure option that helps them to succeed (no matter how they choose to use their money), then you may get second looks from those who are tired of bad news – or even the recent memory of bad news.

What do you think? I’m interested in your own thoughts about our recent market correction.